The trade association said the majority of these claims will be for travel cancellations, however some claims will be for disruption costs incurred overseas.

The £275m pay out estimate exceeds the existing highest annual figure for cancellation pay outs – this was £148m back in 2010. This year’s figure, by comparison, will be at least twice as much as all the cancellation payments made in 2019.

The record figure also dwarfs the £62m cancellation and disruption payments that were made following the Icelandic volcanic ash cloud in 2010.

The ABI expects there to be 400,000 coronavirus-related claims; this compares to the 294,000 cancellation and disruption claims that were received in 2010, the previous highest year on record for these types of claims.

Mark Shepherd, ABI’s assistant director and head of general insurance policy, said: “At this unprecedented time, travel insurers are helping soften the financial blow for thousands of customers whose travel plans have been cancelled or disrupted by coronavirus.

“Along with compensation from sources, such as airlines and credit card providers, travel insurers are helping customers get through these tough times.”

ABI travel insurance members have agreed a series of travel insurance pledges to ensure extra support for customers, including having in place contingency plans to deal with valid claims as quickly as possible.